LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025
Life Time Group Holdings, Inc. (LTH) reported its quarterly financial results for the period ended March 31, 2025. The company’s revenue increased by 12% to $1.23 billion, driven by growth in its membership and consumer segments. Net income rose to $143 million, or $0.65 per diluted share, compared to $123 million, or $0.56 per diluted share, in the same period last year. The company’s operating income increased by 15% to $243 million, driven by higher revenue and improved operating margins. LTH’s cash and cash equivalents decreased by $100 million to $343 million, primarily due to the repayment of debt and investments in its business. The company’s debt-to-equity ratio remained stable at 1.3x. Overall, LTH’s financial performance was strong, driven by its continued growth and operational improvements.
Overview of Life Time’s Financial Performance
Life Time, the “Healthy Way of Life Company,” is a leading provider of premium health, fitness and wellness experiences. The company has over 1.5 million individual members across 180 centers in the United States and Canada. Life Time has experienced strong financial performance, driven by growth in membership dues, increased utilization of its in-center offerings, and the expansion of its portfolio of premium centers.
For the three months ended March 31, 2025, Life Time reported total revenue of $706.0 million, up from $596.7 million in the same period in 2024. This 18.3% increase was primarily due to a $105.2 million (18.1%) rise in Center revenue, which makes up 97.1% of the company’s total revenue. The growth in Center revenue came from a 17.9% increase in membership dues and enrollment fees, as well as a 18.6% rise in in-center revenue.
Life Time’s net income for the first quarter of 2025 was $76.1 million, up significantly from $24.9 million in the prior year period. This strong profitability was driven by the increase in revenue as well as improved operating efficiency, with the company’s net income margin expanding from 4.2% to 10.8%.
The company also reported robust non-GAAP metrics, with Adjusted EBITDA increasing 31.3% to $191.6 million and Adjusted net income more than doubling to $88.1 million. These non-GAAP measures provide additional insight into Life Time’s underlying financial performance by excluding the impact of certain one-time or non-cash items.
Membership and Center Growth
A key driver of Life Time’s financial success has been its ability to grow its membership base. As of March 31, 2025, the company had 879,751 total memberships, up from 853,072 a year earlier. This 3.1% increase in memberships, combined with higher average monthly dues, led to the 17.9% rise in membership dues and enrollment fees.
In addition to growing its membership, Life Time has been expanding its physical footprint, opening one new center during the first quarter of 2025 to bring its total to 180 centers. The company’s total center square footage increased 4.7% year-over-year to 17.7 million square feet. These new centers, combined with higher utilization at existing locations, drove the 18.6% increase in in-center revenue.
Life Time’s strategy of opening premium, resort-like centers in affluent suburban and urban markets has allowed it to attract higher-income members and generate greater revenue per membership. The company’s average Center revenue per center membership increased 13.3% to $844 in the first quarter of 2025.
Operational Efficiency and Profitability
In addition to driving top-line growth, Life Time has also focused on improving its operational efficiency and profitability. The company’s Adjusted EBITDA margin expanded from 24.5% in the first quarter of 2024 to 27.1% in the same period of 2025, reflecting the company’s ability to leverage its fixed costs.
This improved profitability was driven by several factors:
- Center operations expenses increased at a slower rate (14.9%) than the 18.1% rise in Center revenue, indicating better cost control.
- Rent expense increased 12.3%, a slower pace than the growth in revenue, as Life Time continues to execute its asset-light real estate strategy.
- General, administrative and marketing expenses grew 18.4%, roughly in line with the increase in total revenue.
- Interest expense declined 32.9% due to lower average debt levels and interest rates.
The combination of strong revenue growth and improved operational efficiency allowed Life Time to more than double its Adjusted net income from $30.5 million in Q1 2024 to $88.1 million in Q1 2025. This translated to a significant increase in Adjusted net income margin from 5.1% to 12.5%.
Outlook and Strategic Initiatives
Looking ahead, Life Time believes it has significant opportunities to continue expanding its portfolio of premium centers, targeting 10-12 new locations per year on average using an asset-light model. The company currently has 28 centers open for less than three years and 13 new centers under construction, providing a strong pipeline for future growth.
In addition to new center openings, Life Time is executing on several strategic initiatives to drive revenue, engagement and memberships:
- Expanding offerings like pickleball, Dynamic Personal Training, small group training, and its ARORA community for members aged 55+
- Launching new performance and longevity health services through its MIORA program
- Enhancing its LifeCafe, LifeShop, LifeSpa and e-commerce offerings
- Investing in its digital platform to provide a true omni-channel experience for members
These initiatives are designed to further elevate and broaden Life Time’s member experiences, allowing members to more easily integrate health, fitness and wellness into their daily lives.
Risks and Macroeconomic Factors
While Life Time has demonstrated resilience through various economic cycles, the company continues to monitor potential macroeconomic risks, including the impact of inflation, interest rates, and a potential recession. So far, these factors have not had a material impact on the business, and Life Time believes its premium positioning and focus on high-income members provides some insulation.
Additionally, the company’s asset-light real estate strategy and in-house construction expertise allow it to better control the pace of capital expenditures and manage costs. Life Time also benefits from strong brand loyalty and member engagement, which have historically supported the business during economic downturns.
Conclusion
Life Time has delivered impressive financial results, driven by robust membership growth, expansion of its premium center network, and strategic initiatives to enhance the member experience. The company’s focus on operational efficiency has allowed it to drive significant improvements in profitability, as evidenced by the expansion of its Adjusted EBITDA and Adjusted net income margins.
Looking ahead, Life Time appears well-positioned to continue its growth trajectory, with a strong pipeline of new center openings and a strategic roadmap to further elevate its offerings and digital capabilities. While the company remains vigilant to macroeconomic risks, its premium positioning, asset-light model, and loyal member base suggest it is well-equipped to navigate any potential challenges and capitalize on the growing demand for comprehensive health, fitness and wellness experiences.
